YOUR COMPANY IS LOOKING FOR A/R FINANCING – YOUR WAY!
ACCOUNTS RECEIVABLE FINANCING SOLUTIONS FOR CANADIAN BUSINESS
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
Account Receivable loans in Canada are, rightfully so, positioned as providing a ' big bounce ' to business cash flow challenges. But what if we could turn that ' bounce' into a ' big bang ' - Here's our theory - no pun intended, so let's dig in.
CAN YOU SURVIVE THE CASH FLOW & WORKING CAPITAL SQUEEZE?
There is no bigger constraint to a business than feeling the cash flow and working capital squeeze. While the business owner and financial manager often hear otherwise, access to capital and credit in the SME Commercial sector still feels quite challenging.
FACTORING LENDING IS BECOMING MORE POPULAR
That then forces owners and management to look at new ways to address the Canadian financing challenge, and one of them is known as ' factoring lending. ' It's one of those solutions that fill the gap, allowing companies to allow cash flow to move ' lock step ' with sales.
IS YOUR FIRM UNABLE TO ACCESS BANK CREDIT?
More often than not its the solution for companies that can't access bank credit and allows them to be on an equal footing with their competitors who for some reason seem ' to have all the financing they need ( more often than not, they don't - it just seems that way )
SEARCHING FOR NEW SOURCES OF FINANCE
It's that gap in the SME sector that is constantly looking for a new source of finance. Besides financing cost, the difference between bank and A/R financing is not as big as most people think. When the bank finances sales, the A/R is taken as collateral and assessed in your business's overall creditworthiness.
Factoring lending is secured differently, as the paperwork around the facility has the receivable being constantly sold to the lender and cash flowed, typically on the same day. In fact, as a surprise to some, A/R financing from a commercial finance firm / factor companies actually advances more on your receivables than a bank would. Usually 15% more!
FACTORING OF RECEIVABLES IS PERFECT FOR A HIGH GROWTH ENVIRONMENT
Generally speaking, a bank prefers slow, steady growth; factoring lending typically works optimally when a company is growing sales. In fact, when sales are in decline, it's not recommended that the owner /manager consider a commercial AR finance facility, as things tend to backfire somewhat.
WHAT IS THE BEST TYPE OF FACTORING FINANCE? TALK TO 7 PARK AVENUE FINANCIAL ABOUT CONFIDENTIAL RECEIVABLE FINANCING
So what about that ' annoying ' part of factoring financing in Canada. We're referred to because for traditional factor financing done in this manner, your clients receive a notification around the process and payment under this facility type. Our recommended solution? It's having your facility run on a ' CONFIDENTIAL ' basis allowing you to bill and collect your own accounts receivables without notification to any other party. It's kind of like banking but without the bank. Click here for more info on Confidential Receivable Finance
5 KEY BENEFITS OF ACCOUNTS RECEIVABLE FACTORING
If you arent aware of the key benefits of financing sales growth through factoring, they include:
Short term bulge cash flow solutions
Increased flexibility
Fast approval - typically a week or two - bring immediate cash for the invoice amount you wish to fund
Accounting of factoring of receivables is straightforward - financing receivable accounting should be discussed with your accountant
Asset based a/r funding can be implemented on a recourse or non recourse basis
CONCLUSION
Reasons business owners don't use invoice factoring via factoring finance include the cost or simply that they weren’t aware that financing of this type was available via a factoring company. Those living in the past (that’s a dangerous thing to do in business, by the way) even think there’s some negative connotation to using alternative financing.
They are wrong, by the way, as some of the largest, most successful firms in Canada utilize accounts receivable financing and securitizing receivables of some sort with factoring companies and other financial institutions.
A large firm sells its account to achieve off balance sheet funding. Small business of course have to wait until their invoice is paid unless they choose to fund a/r in some manner. As a business sells a/r via factoring it allows companies to maintain optimum working capital.
Third party receivable factoring comes with factoring fees, which are expressed as a fee , and not an interest rate . That factoring fee is often confused with a bank loan pricing , which is an incorrect comparison.
Small business should ensure it has access to asset based lending solutions that might allow the company to operate and grow revenues for it's goods or services. So, if you want to accelerate the ' bounce ' in A/R financing into a ' bang, 'consider Confidential Receivable finance as one solution to the finance challenge. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success who can assist you with accounts receivable loans and facilities that make sense. The benefits of factoring and financing accounts receivable should no longer be a mystery! It's an effectie way to finance the balance sheet and is used by thousands of firms in Canada.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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